Travel and entertainment expenses stand among the top business expenses. Implementing expense management solution can help reduce the cost of expense report processing while eliminating the scope for submitting out-of-policy expense claims. There are numerous ways expense automation can help businesses control costs. Expense report software will give you the ability to drill down into thousands of transactions to help you identify trends, spot anomalies and gain actionable insights into complex data sets.
Let’s take a look at some of the biggest benefits that organizations can get by having analytics as a part of their expense management solution.
Not complying with expense policies is one of the biggest problems that finance departments encounter. Having a pre-trip approval process for travel expenses can stop a considerable amount of non-compliant spending before it happens. However, booking leakage can still occur in any organization, with rogue bookings made outside of approved channels. Many out-of-policy expense claims are of a significant amount. If a pattern of non-compliance appears, organizations would be losing thousands of dollars on a larger scale. So, how to detect the patterns? Simply adding line items on a spreadsheet does not allow you to spot irregular patterns and often will not yield actionable data.
To identify such patterns, an expense solution with an easy-to-understand visual dashboard that shows out-of-policy expense claims can help you. The data can be further explored to identify specific expense types, department of expense categories and actions that can be taken to understand why the non-compliance is taking place subsequently.
Vendors including airlines, hotel chains, and car rental offer significant benefits to organizations when they commit a certain amount of spend each year. The discounts can range up to 30 percent for companies. Making use of expense report software analytical capabilities allow organizations to track spending across a wide array of criteria – type, vendor, location, and business unit.
This requires organizations to get information on various data points to get favorable rates. For instance, with hotel chains you can get the number of nights and average cost per night across different markets and various geographies. All these data points are required to secure the best rates with vendors. Once discount rates are negotiated, businesses should ensure that spend volumes remain at agreed levels, otherwise, they could be in breach of contracts and may lose discounts. Expense solution with analytics feature can help employees check for compliance in real-time and can identify any trends of non-compliance.
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